What is co-insurance in health insurance?

Co-insurance refers to the percentage of costs for covered healthcare services that the insured is required to pay after they have met their deductible. This means that once the policyholder has satisfied the deductible amount, they share the cost of additional healthcare services with the insurance company in the form of a predetermined percentage. For instance, if the co-insurance rate is 20%, the insured will pay 20% of the costs of a service, while the insurer will cover the remaining 80%. This framework helps both the insurer and the insured manage healthcare costs, as it encourages individuals to be mindful of their healthcare spending after the deductible has been met.

In contrast, the other options relate to different health insurance concepts. A fixed amount paid for each healthcare visit refers to co-payment, which is distinctly different from co-insurance. The total amount payable by the insurer relates to overall coverage and payout limits, not to the responsibility of the insured. The annual cost of insurance coverage pertains to premiums, which are the regular payments made to maintain the insurance policy. Understanding the concept of co-insurance is essential as it influences how out-of-pocket expenses are managed in the scope of health coverage.